By CRISTINA JANNEY
Hays Post
A recent poverty analysis showed Hays has the highest poverty rate in the multi-county region at 18%
Although some have suggested increasing wages would help those who struggle financially, Doug William, director of the the local economic development agency, recently explained the solution to such a problem is not so easy.
"It is a complex issue," Williams said during a recent interview on the Morning Blend on KAYS. "One of my favorite quotes is that for every complex problem, there's a solution that is clear, simple and wrong. I think that applies to this situation very much."
Hays City Commissioner Reese Barrick urged local businesses to increase wages at a recent city commission meeting in response to the poverty data.
“The reality is it would take to get all of Hays outside of poverty and not always struggling week to week and month to month, would people with jobs making $25 an hour,” he said.
He added, “We wouldn’t have to have all of these [nonprofit] organizations if we were able to pay people enough so they were outside of the risk zone every month. …
“If we want a community where everyone can participate and put money back into the community by shopping everywhere, then we have to pay people enough so they can participate. We can take care of the poverty level. It’s really a wage thing.”
In addition to the 18% poverty rate, another 23% of Ellis County residents are classified as Asset Limited, Income Constrained, Employed, or ALICE. These households are above the federal poverty level but cannot afford their county's basic cost of living. They do not qualify for public assistance.
SEE RELATED STORY: Ellis County reports highest poverty rate in region
Williams said lower-wage earners would benefit from an increase in wages to $20 per hour.
"That presents challenges for businesses to keep their doors open, to operate at a profitable level, so they can continue to employ people and offer what they offer to a community," he said.
The current minimum wage in Kansas for nontipped employees is $7.25.
The federal government sets the federal minimum wage. States can set higher minimum wages if they choose. Cities in Kansas cannot set minimum wage standards.
However, Williams noted most workers in Ellis County earn more than the minimum wage because of the demand for labor and the shortage of workers in the area.
The Ellis County unemployment rate in October was 2.7%. Anything less than 4% is considered low.
In response to Barrick's comments, some city workers addressed the Hays City Commission at its Nov. 14 meeting, noting that some city workers did not earn $20 per hour.
Williams said the consequences of raising those workers' hourly wages would potentially be increased taxes.
"Again, there is always this cause and effect, and it's never a simple process," Williams said.
"A $20 across-the-board hourly rate, I'm sure, would be problematic for a lot of businesses," he said.
Mark Hess of Hess Services recently shared a response to Barrick's comments in a letter to the Hays Post, saying increasing wages would drive up costs for products and services in Hays and make it difficult for local businesses to compete in the region.
SEE RELATED STORY: Response to City Commissioner Barrick's statement on business wages
"Labor is one of the largest, if not the largest, components of the production of a product," Williams said. "If that cost goes up, they have to pass that on. Does that change their competitive stature within their market?"
Williams said the United States has lost thousands of jobs to other countries where the labor market is much different.
"They can hire people for much less than they can hire people here, and consequently, they can offer their products at a lower price," he said. "That's capitalism.
"That has caused some problems in this country with the loss of manufacturing, but again, it's a very complex situation, and each business is a little bit different."
Williams said the key factor is employees are important to businesses.
"Businesses need to pay what they can to employees to keep them and to offer a fair wage to allow them to have a reasonable lifestyle and provide good value to the business owner," he said.
"There are no simple answers, but an across-the-board blank say everybody's going to go to $20 an hour would probably not be the answer to a problem like this," Williams said.
In the gap are charitable programs and subsidies for people whose income qualifies, Williams said. These can be food banks or rental assistance programs.
"There are many programs like that. Are there enough of them? Probably not," Williams said. "We need to try to help people if we can."
Williams said the poverty data was alarming.
"But I think, by and large, our community does a great job employing people and having good jobs," he said. "Our city and county and school district do a great job of what they do.
"While everybody would like our property taxes to be less, relative to other places in this state, [our property taxes] are actually low."
Although property taxes have increased, those increases are not unique to Hays, Williams said.
Williams said Hays compares favorably to other communities in many ways. Although many think housing costs are high in Hays, they are competitive with peer communities. He said rates tend to be higher, but that is true in most college communities.
"I think we have a lot to be thankful for," Williams said. "Yes, we have work to do. Yes, we have people in the community who struggle. We need to consistently think about how we help those people and allow people to pay those people better, but it has to be a balance."